The low value of the dinar has fallen year savings diminish chances «float» Dollar

The low value of the dinar has fallen year savings diminish chances of «float» Dollar

Mohammed Hadi

Baghdad - Cannot for the proposal "floating dollar" stand up to the vagaries of the market economy; in light of the decrease of the local currency's value against a difficult and declining public savings level, offset by higher imported goods prices, and therefore "chronic increase" occur in the general inflation levels, Despite assurances from economists that the "float" may provide financial liquidity, but not for a long time, because of the survival of the Iraqi economy's dependence on import, and the exchange control doors were still weak by the government.

Former officials at the Central Bank shows that one of the terms of the flotation assumes a Private sector next to the Central Bank is asking the dollar to the market as well, but in Iraq, the Central is the only body that pump the dollar for the domestic market, which creates "confusion" in the marketplace work.

The officials pointed out that the idea of flotation, require "do not specify a certain amount to put dollars into the market. "

She talks media leaks that the government will be forced to float the dollar, in the case failed to apply the new salary scale; where he sees Supporters of this proposal is that it will be the key to resolving the financial crisis that hit the country.

It is said that there are three ways, deals central banks with foreign currency; first is made up by the "limiting factor" to be adopted by the CBI, which includes a fixed exchange rate to the dollar price, and inject dollars into the market to maintain the stability of the price.

The second method is called "float", and thumb the market is controlled the exchange rate, while including third way, a "floating orbit", or unrestricted determine the specific price of the dollar, and another represents a maximum him, to let the currency float between these two prices.

and see world oil prices since the middle of last year continuous decline, because of the use by some countries to increase Marodha against the lack of demand for it, what caused a severe financial crisis in Iraq, which is known for raw Bria economy. The new prime minister Haider al-Abadi, last week, his warnings of the financial situation in the country as a result of the current financial crisis caused by the decline in oil prices and the war against al "Daash" that drain big money from the budget. In the opinion on behalf of Jamil Anton, an economist, said in an interview to the correspondent of "the world", said the adoption of "floating dollar" in the current situation which is going through the country, rather than "limiting factor" in place by the Central Bank, "will solve the problem of lack of financial liquidity including government suffer now, "persisting but that" will not last long ", because it would cause economic problems cast a shadow over all market activities, which suffer a deterioration in infrastructure.

explains Anton, he was at the forefront of these problems," the depreciation of the dinar against other currencies, as well as the decline in the value of savings of citizens, compared with a rise of imported goods and prices of goods ", which leads to the result to" a large and chronic increase in inflation.

"Anton adds that the survival of the Iraqi economy dependent on imports, not production, makes the currency was floated in any way." It is not true, "as it is" There is no government control on the doors of exchange; it is still corrupt deals swallow up the bulk of the budgets. " So confirms Anton, who is close to sources of government decision-making, that "the adoption of the flotation process is not on the government table now," calling on government bodies responsible and the central bank to expand economic revenue base, to get out of the financial crisis experienced by Iraq.

For his part, Dr. Ahmed Abrihi, financial expert and former Deputy Governor of the Central Bank, in connection with "the world" yesterday that the talk of some politicians for floating dollar "wrong and illogical", because of "the lack of side responsible for pumping dollars into the local market only The central bank, while that one of the terms of the flotation provides for a private sector next to the central bank to throw dollar market also, as exists in South Korea and the United States and Indonesia. "

Shows Abrihi that "float currency requires the presence of freedom in the presentation of currency equivalent to freedom of demand, meaning you do not specify a certain amount to put the dollar in the market," explaining that "the hard currency that feed the market comes through the export of oil operations, ie through the central bank, where there is no private productive sector, is able to insert a hard currency into the country ", and thus this" makes officials on monetary policy in Iraq do not support the idea of floating the dollar, they create confusion in the market and a clear action ".

The Haitham al-Jubouri, a member of the Finance Committee in the House of Representatives suggested in a statement to "the world", the adoption of "unrestricted flotation" in the auction currency instead of "limiting factor" that determines a fixed exchange rate to the dollar price, trying to keep it to fill the market need of hard currency, referring to the The committee suggested that the central bank and the government to adopt this way "being the best, and supported in most countries of the world." He revealed at the time for sending 15 thousand purchase invoice currency "rigged" to justice, and stressed that a large number of companies that have turned to money "fake", while calling for the formation of a competent financial courts financial matters.

As said the Central Bank's board member Majid picture in touch with "the world" that the bank is trying to maintain the stability of exchange rates, pointing out that the monetary policy and instructions "according to the economic conditions experienced by the country changed." He says that the picture of the bank cash reserves fell to $ 60 billion due to lower crude prices, but he assured that this decline does not threaten the collapse of the local currency, "being a fill 160 percent of the money supply of the Iraqi dinar."